### Summary
Economists and the Reserve Bank of Australia are determined to combat inflation, but their focus on wage increases as the cause of inflation overlooks the pricing power of large firms and the lack of competition in the market.
### Facts
- Economists argue that businesses raise prices in response to market forces, not out of greed.
- However, the rapid rise in prices is often perpetuated by workers and their unions demanding higher wages to keep up with the cost of living.
- The solution proposed is for workers to accept a small pay rise and for interest rates to be raised to put pressure on workers with mortgages.
- The Reserve Bank believes that a rise in the unemployment rate by 1 percentage point to 4.5% would help bring down inflation.
- An increase in competition between small firms is needed to make the price mechanism work as intended, but oligopolies dominate many industries in Australia.
- While other countries have recognized rising profit margins as a cause of inflation, the Australian government has dismissed this analysis.
### Opinion
- The focus on wage increases as the main cause of inflation overlooks the pricing power of large firms and the lack of competition in the market.
- Strengthening laws defending competition is necessary to fix inflation.
The article criticizes economists and their understanding of inflation, arguing that their focus on controlling wages and putting workers out of jobs to curb inflation is flawed, and that the real issue lies in the lack of competition and the pricing power of big businesses.
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Summary: Bank of Canada deputy governor Nicolas Vincent states that businesses in Canada are increasing their prices more often and by larger amounts, contributing to higher-than-expected inflation.
US job growth exceeds expectations, with 336,000 jobs added in September, increasing the likelihood of further rate hikes by the Federal Reserve, while in Canada, job gains of 63,800 in September and soaring wages also raise the chances of another rate hike.
Canadian businesses and consumers are feeling the impact of higher interest rates, resulting in reduced spending and subdued sales, although inflation expectations remain high, posing a challenge for the Bank of Canada's upcoming interest-rate decision.
Canada's inflation rate decelerated to 3.8% in September, lower than economists were expecting, due to lower prices for various goods and services, including travel, durable goods, and some grocery items.
High inflation imposes long-term costs on society and the economy by reducing consumer investment, increasing wage negotiations, and forcing individuals to cope with rising prices, leading to skewed markets and a greater loss of purchasing power.
